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Question: there are two buyers zeus and athena and two sellers...

Question details

There are two buyers (Zeus and Athena) and two sellers (Hermes and Hera) in the market for icecream in a small neighbourhood in Sydney. The weekly individual demands and individual supplies of each seller at different market prices are given in the following tables:

Market Price Demand of Zeus Demand of Athena Supply of Hermes Supply of Hera
$1 10 7 1 1
$2 8 6 2 2
$3 5 5 3 2
$4 4 3 5 2
$5 1 1 7 3

Assume that the market is perfectly competitive. For each of the following questions, select the correct answer from the dropdown box.

(a) If the market price is $2, quantity demanded by the market is equal to

i)2

ii)17

iii)10

iv) 14

units of ice cream

 

(b) The equilibrium price is

i) $1

ii)$2

iii) $3

iv) $4

v) $5

 

(c) If the market price is $3, there is a

i) shortage

ii) surplus

of icecream in the market equal to

i) 5

ii) 8

iii) 10

iv) 0

units of ice cream

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